Pillow Talk Sessions · 2026-06-18 · 44 min
Key moments - from our scoring
Substance score
53 / 100
Five dimensions, 20 points each
Maxine Leufroy-Murat charts his evolution from short-let pioneer to branded residential operator, revealing why the traditional short-let model - despite early promise - hits a growth ceiling. Starting City Relay around 2014-2015 at the dawn of Airbnb's expansion, he scaled to 400+ properties and 50 staff organically, then spun out operations into OPAGO (now managing 5,000 units across London and Paris). The core challenge: high customer acquisition costs paired with inevitable inventory loss as properties rotate out. Rather than accept stagnation, Leufroy pivoted aggressively - OPAGO became a tech-enabled outsourcing platform for PMS integration, while his property investment vehicle, LeFroy (over £300m deployed, 400+ units in Chelsea, Notting Hill, Fulham), fed a new brand: Sejour Living. Sejour inverts the short-let formula, anchoring on long-term lettings with hospitality-grade service, design consistency, and community features - flexing short-term during lease-up periods. This conversation unpacks how operational excellence, capital deployment, and strategic pivoting allow survival when business models compress.
Short-let operators face high customer acquisition costs and constant inventory churn because owners are motivated by temporary circumstances (selling a house, overseas relocation, temporary income generation). You spend heavily recruiting owners who inevitably leave, making sustainable growth extremely challenging even though early scaling appears quick.
Most competitors - including Housed, Pass the Keys, Guest Ready, and Hello Guest - stalled at 300-400 properties by 2016 and failed to scale further meaningfully. Many have since disappeared entirely. Survivors pivoted into adjacent services like PMS platforms, franchising, distribution networks, or operations outsourcing rather than trying to grow the core short-let business.
Sejour is a branded residential living brand anchored on long-term lettings (with mid-lets, corporate lets, and short-lets filling gaps), powered by City Relay and OPAGO operations. It applies hospitality expertise and design consistency - differentiators absent in traditional PRS - to achieve higher rents and customer satisfaction while maintaining flexibility through short-term options during lease-up.
OPAGO is a tech-enabled operations outsourcing platform managing ~5,000 units in London and ~2,000 in Paris. It handles housekeeping, cleaning, maintenance, and check-in via a PMS-integrated platform, allowing clients (typically short-let and lettings operators) to reduce internal operations staff from 50+ to near-zero by outsourcing all logistics.
LeFroy's well-designed, standardized apartments in Chelsea, Notting Hill, and Fulham didn't fit City Relay's mixed-quality inventory (which reflects varied owner designs and conditions). Creating Sejour allowed him to showcase premium apartments consistently and attract tenants seeking branded living experiences, achieving higher rents and satisfaction than traditional PRS operators.
Our reviewer’s read on each dimension, with quotes from the episode.
The episode contains some genuinely useful industry observations - particularly the frank admission that no shortlet management business has meaningfully scaled in 10 years, and the London prime resi yield thesis - but these are interspersed with generic entrepreneurial platitudes ('pivot or die', 'customer is king', 'learning by doing') and the conversation never goes deep enough to be truly dense with actionable insight.
a lot of these companies had maybe three or four hundred properties in 2016 and probably have the same amount of inventory now, if not less, you know, which is shocking
you've seen the prices go down by maybe 25, 30, 35 percent over 12 years, but then in front of it, you've seen rents rising... you can buy assets in London now, maybe yielding 6% with good reversion, achieving 7 to 8% yield
The scarcity-of-prime-stock argument against BTR competition is a genuinely interesting framing, and the honest industry autopsy of shortlet scaling failure is refreshingly candid, but the broader thesis - bring hospitality culture to residential - is well-trodden ground, and the 'pivot or die' philosophy is a cliché.
we are playing into scarcity, right? There is no, you know, the assets we own cannot be replicated, you cannot build in the areas we're in
we've chosen to go vertical and to own the whole chain of value, you know, from from acquiring to developing to managing and you know, operating and down to the FM side
Maxime is a genuine multi-company operator with real skin in the game - he has bootstrapped a shortlet management business to scale, built an ops platform with 7,000+ units under management, and personally deployed £300M in London real estate - giving him authentic practitioner credibility rather than thought-leader polish.
we scaled that business organically with no external funding initially for the first five, six years, up to 50 employees and I think four or five hundred properties
OPAGO, which currently manages around 5,000 units in London, the 2,000 in Paris
The episode delivers a solid layer of concrete numbers - unit counts, yield figures, price decline percentages, named competitors and brands - that lift it above vague market commentary, though many claims are given approximately and the conversation doesn't press for deeper data on costs, margins, or tenant economics.
we run, I think 150 live right now on Sejour. We'll probably have 300 by year, and probably 400, 450 by next year
you've seen the prices go down by maybe 25, 30, 35 percent over 12 years... you can buy assets in London now, maybe yielding 6% with good reversion, achieving 7 to 8% yield
The host knows the sector well and asks contextually relevant questions (Renters Rights Act, community strategy, investor relations), but she frequently answers her own questions or summarises into platitudes rather than probing the guest's claims, and there is no meaningful pushback or challenge to any assertion throughout the conversation.
Adapt or die is the the thing here
So also really well placed for the Renters Rights Act as well, which allows that flexibility from the tenant side that maybe the rest of private rental, it's a bit of a shock
Computed from the transcript - who did the talking, and the words that came up most.
Like many entrepreneurs entering the short-term rental space, Maxime Leufroy-Murat started out believing growth was a function of acquiring more properties and scaling operations. After more than a decade in the industry, he has reached very different conclusions. Maxime Leufroy-Murat has spent over a decade inside the short-term rental industry - building City Relay, one of London's most established lettings management platforms, and Opago, a tech-enabled operations business now managing around 5,000 units across London and Paris. When growth hit a ceiling, he built sideways - into a new venture called Sejour Living, a design-led branded living concept in the heart of London targeting the part of the private rented sector that institutional capital is just beginning to take seriously. His central argument is that growth alone is not a strategy. Businesses that have survived the last decade in STR have done so by constantly reading the market and evolving ahead of it, not by holding their position and hoping the fundamentals stayed the same.
Transcribed and scored by The B2B Podcast Index.
1 - > SPEAKER_01: You live in a world where lifespan of companies is 2 - > getting shorter and shorter and shorter and shorter. 3 - > And if you don't pivot, you die. 4 - > So you need to constantly keep looking at trends and 5 - > understanding what works to try to change the way you work and 6 - > attract different types of customers and speak their 7 - > language, etc. 8 - > So it is key to survival.
9 - > SPEAKER_00: My name is Jessica Gillingham, and I am the host of 10 - > the Pillow Talk Sessions podcast. 11 - > And my guest today is someone I've known for many years. 12 - > His name is Maxime Lefoy Morat, and he is the founder and CEO of 13 - > a number of companies: City Relay, Opago, LaFroy, and then 14 - > also his new venture, which is Sejour Living. 15 - > We talk about Maxime's journey going from short stays with City 16 - > Relay to this new venture into the branded residential living 17 - > sector.
18 - > And we talk about the nuances, the differences, the path from 19 - > short stays to Resi and branded Resi and the living sectors, and 20 - > why he's taken that path, what it means, the different nuances 21 - > in both of those marketplaces and uh his whole journey there. 22 - > It's a really good conversation. 23 - > So I hope you enjoy it and do listen in. 24 - > Maxime, thank you so much for coming on the Pillow Talk 25 - > Sessions podcast.
26 - > I have long wanted to have this conversation with you. 27 - > So thank you very much for making the time. 28 - > And I'm really, I think you've had such an interesting journey 29 - > and you've got really interesting sort of not just 30 - > perspectives, but experience that I think will add a lot of 31 - > value to our audience. 32 - > So let's crack on with the conversation.
33 - > But firstly, Maxime, can you give a brief introduction of 34 - > yourself and your companies? 35 - > You've got a number of companies, and we will go into 36 - > that evolution during the discussion, but uh but a quick 37 - > intro would be wonderful. 38 - > SPEAKER_01: Thanks, Jessica. 39 - > So quickly, yeah, I'm uh I'm French from Paris.
40 - > I came to London about 17 years ago as an equity trader at 41 - > Morgan Stanley. 42 - > And uh and then I left this job and I started a bunch of 43 - > startups, and I started my journey into the shortlet sector 44 - > about 12 years ago, roughly. 45 - > So it was a time where we could you know master lease properties 46 - > and and shortlet them and try to deliver uh higher income through 47 - > uh arbitrage, and then very quickly I started City Relay, 48 - > which is one of the leading shortlet management companies in 49 - > London.
50 - > Uh so we were managing properties on behalf of owners 51 - > on a on a revenue management basis, uh, revenue share basis. 52 - > And um and so when I started this business, you know, I did 53 - > everything myself. 54 - > I was really, I mean, it was a startup, you know, working from 55 - > my flat with a bunch of interns, and uh and and I learned to run 56 - > operations. 57 - > We scaled that business organically with no external 58 - > funding initially for the first five, six years, up to 50, 50 59 - > employees and I think four or five hundred properties.
60 - > So really scaled it uh organically. 61 - > And while doing this, um we started to build really solid 62 - > operations, and so we grew the operations for us, and initially 63 - > we did everything in house. 64 - > I mean, we had even rollers and we were doing all the ironing 65 - > and the linen, and everything was done in house, and and 66 - > probably that was a mistake, clearly. 67 - > So we stopped doing that.
68 - > But at the same time, we learned a lot about operations, and we 69 - > learned about the difficulty that short let operators have 70 - > around those activities, and we started to sell operations, and 71 - > there was the birth of OPAGO, which started at City Relay 72 - > Solutions, but eventually grown to be OPAGO, which currently 73 - > manages around 5,000 units in London, the 2,000 in Paris. 74 - > And that company does all the housekeeping, leaning, 75 - > maintenance, check-in through a tech-enable platform.
76 - > So we plug in to the PMS of our clients, and basically we help 77 - > them outsource all of their operations. 78 - > So essentially, you know, we've we've had businesses we've taken 79 - > on board, which used to have massive operations in London 80 - > with 50 plus staff, which have essentially gone to zero through 81 - > outsourcing all the operations to us. 82 - > Uh, it's a business that only works with extremely high 83 - > density. 84 - > Obviously, managing pepper potted units around London is 85 - > extremely challenging.
86 - > So that's the story of you know, essentially CT Relay and Opago. 87 - > At the same time, I was starting CT Relay, I always had an 88 - > interest in property, and I started looking at investment 89 - > and discussing with high net worth individuals how we could 90 - > do investment together. 91 - > And this was the launch of Lefroy. 92 - > So essentially we started buying small apartments and then larger 93 - > apartments and small buildings and then larger buildings.
94 - > And so the journey from LeFroy really started the same way, you 95 - > know, organically, I still I still own 100% of Lefroy. 96 - > It's my business, and uh and I grew that uh initially from you 97 - > know a few flats to now having bought, I think, you know, over 98 - > 400 units uh and and and uh invested probably in excess of 99 - > 300 million pounds in London real estate. 100 - > And um and so that business over time started to create a lot of 101 - > really nice apartments.
102 - > So we bought a lot of buildings around Allscourt, Chelsea, 103 - > Notting Hill, Fulham. 104 - > Um, and as we started to put those apartments to rent through 105 - > City Really, we felt look, City Release has all kinds of stock, 106 - > right? 107 - > We have beautiful houses, we have little apartments, but 108 - > they're not standardized. 109 - > The design is whatever the owners have as design.
110 - > And so it did not make sense to mix the well-designed, all 111 - > alike, all look-alike apartments from LeFroy into City Relay. 112 - > So we created a new brand about a year and a half ago called 113 - > Sejour. 114 - > So Sejor is basically uh a customer-facing brand where we 115 - > put all our nicely designed apartments on it, and um and it 116 - > it's powered by City Relay and Opago in the background. 117 - > So just customer-facing, but this way we have a really nice 118 - > way to showcase all our apartments, and um, and it's 119 - > proving successful.
120 - > And we say, sure, we we're building a community angle, 121 - > we're trying to make sure you know the tenants have a very 122 - > special experience because we come from a hospitality 123 - > background. 124 - > And in the PRS sector, most actors do not, right? 125 - > So we have uh very high quality service, which is quite unique 126 - > in that sector, and and therefore we're able to achieve 127 - > slightly higher rents, but also higher customer satisfaction. 128 - > Uh, it's all very design-led, and uh, and this is the focus at 129 - > the moment.
130 - > We're really looking to grow the brand through our acquisition, 131 - > we're doing through LeFroy, but also potentially through working 132 - > with other developers to license Sejour and allow them to have 133 - > Sejour block where we would advise them on the FFNE and the 134 - > Finnish to be able to do those blocks. 135 - > Now, Sejor is not a shortlet brand, it is uh a living brand, 136 - > and the core of the activity is long leds, and and we do have 137 - > midlets and corporate lets and relocations and all of that, and 138 - > we do have shortlets to fill the gaps, but the core for Sejour is 139 - > longer lets.
140 - > SPEAKER_00: I mean, it's quite a journey, Maxime, and I I really 141 - > want to sort of ask you about all the different points along 142 - > it. 143 - > But that end the end bit or the end for now bit with Sejour is 144 - > that, and and you, you know, we've been on a panel together 145 - > at the Short Stay Show as well about but talking about that 146 - > sort of move towards branded living and that bringing that 147 - > hospitality thinking, that ability to create experiences 148 - > and and provide something different than is typical in 149 - > private rental, is something that is really growing and of 150 - > interest, but also being able to do that flex bit.
151 - > So, in the you know, in I guess your lease up period, being able 152 - > to plug in with your short stay, because of course you've got the 153 - > ability to do that with your operations and your city relay 154 - > hats on, um, is something I want to get to later on in the 155 - > conversation, but can we go back to that beginning of city relay 156 - > because you kind of came into short stays at what might be 157 - > considered sort of the golden era of short stays at sort of 158 - > the beginning of the growth in um short-term rentals?
159 - > You've gone through the journey and the typical journey of 160 - > realizing operations is really difficult and you've mastered 161 - > that and figured all of that out. 162 - > But then also why maybe there is a ceiling to short stays as 163 - > well. 164 - > Um, and I'd love to get your kind of perspective around what 165 - > you've seen in short stays, maybe in your contemporaries and 166 - > in your own journey that has made you look. 167 - > Firstly, you went into the operation side, then into the 168 - > living side as well.
169 - > So, so what are your sort of thoughts around why it's 170 - > challenging in in shortlets and then moving onwards into the 171 - > living part? 172 - > SPEAKER_01: Yeah, okay. 173 - > So I think, I mean, first and foremost, you know, I think that 174 - > business is very, very difficult, right? 175 - > So growing a short stay business is extremely challenging because 176 - > you have a lot of competition because there's a low barrier to 177 - > entry, and your cost of acquisition of customers is 178 - > quite high.
179 - > So you you always spend money on ads, etc., in order to add 180 - > inventory. 181 - > And your return is quite high as well. 182 - > So you constantly lose inventory.
183 - > No, you lose inventory because also it is the nature of 184 - > shortlits. 185 - > People shortlett because maybe they're selling their house, 186 - > it's taking more time than they thought. 187 - > Maybe they move to another country for six months and they 188 - > want to generate some form of income. 189 - > Maybe, you know, there's all kinds of scenarios which are 190 - > temporary scenarios.
191 - > And therefore, you you spend a lot of money acquiring those 192 - > customers who are invariably going to leave you, which is 193 - > very, very difficult. 194 - > So one of the one of the core challenges has been that when we 195 - > started, I mean, I used to recruit my homeowners going on a 196 - > small world at the time, those social media in a small world, 197 - > and we in a social network, a small world, and and we used to, 198 - > and I used to outreach to owners and say, hey, you should trust 199 - > me, I should manage your apartment.
200 - > I've got this great company and we're doing so well, etc. 201 - > And so this was a start. 202 - > You know, I used to go on a small world and and outreach to 203 - > to random homeowners and convince them that you know CTV 204 - > was was was better. 205 - > It was easier at the time because it was really the start.
206 - > I started in I think 2014 or 2015. 207 - > It was the start of Airbnb. 208 - > It was it was a lot easier to to to to start at that time. 209 - > And quickly, you know, we grew the inventory, and I think a lot 210 - > of uh a lot of similar businesses started around that 211 - > time, you know, be it uh housed or maybe pass the keys, or maybe 212 - > guest ready, or or hello guest, or you know, I don't know, 213 - > there's a lot of these companies in London, I think, and they all 214 - > started around the same time.
215 - > It was a very nice business, right? 216 - > It was good, we could scale quickly. 217 - > I would say though that when you look at it 10 years after, um 218 - > nobody's really scaled, right? 219 - > Nobody's managed to scale that business meaningfully.
220 - > Uh some people have managed to scale it somewhat by going 221 - > global and you know, doing acquisition, and and but it is a 222 - > super challenging business to grow. 223 - > And uh and I think you know a lot of these companies had maybe 224 - > three or four hundred properties in in 2016 and probably have the 225 - > same amount of inventory uh now, if not less, you know, which is 226 - > which is shocking, right? 227 - > And and that's not to mention all the companies that have 228 - > disappeared in the meantime, which are which are countless, 229 - > to be honest.
230 - > Uh so it is super challenging. 231 - > Though everybody found new opportunities, you know, 232 - > everybody's been thinking, you know, it's so tough to scale on 233 - > my own. 234 - > So you've you've seen all the the franchise guys, you know, 235 - > either past the keys or the house. 236 - > Or you know, a lot of guys have said, okay, you know why it's 237 - > difficult to scale, so what I need is you know, owners who 238 - > really understand the neighborhoods, you know, market 239 - > real estate is local, you need to have a local understanding to 240 - > scale it.
241 - > So I'm gonna empower a lot of private owners to build scaled 242 - > inventory of 20, 50 properties, and then I will build them a 243 - > platform and I can generate revenue from that. 244 - > You've seen companies like Guest Ready, thinking, look, we build 245 - > great technology in house, we understand that business better 246 - > than anyone, we are doers, so we really get you know the PMS 247 - > world, and so we're gonna build a PMS. 248 - > Uh and and so they've built rent already, and I think they they 249 - > they're successful in in that way, and we're actually using 250 - > rent already.
251 - > So, you know, we're very happy with it. 252 - > SPEAKER_00: You've had companies like uh I've had Alex on the 253 - > podcast previously. 254 - > Okay, great. 255 - > SPEAKER_01: Yeah, yeah.
256 - > You've had companies like uh Under the Dormat, you know, 257 - > where okay, let's own the distribution side, let's try to 258 - > find ways to distribute properties better, let's even 259 - > own a channel and let's build Ospiria, and let's be so 260 - > everybody's trying to do their own thing. 261 - > I mean, we decided look, uh, we've built great operations, 262 - > we're tech-enabled operations, let's go all in on operations 263 - > and let's build Opa. 264 - > So you I think you know, in that industry, most of the survivors 265 - > have pivoted in a way and found new ways to generate income 266 - > because the traditional business idea has proven too difficult to 267 - > deliver.
268 - > And I think that's what we're doing. 269 - > And and you know, yeah, we have lots of brands, etc. 270 - > But they all they all live together and they all come from 271 - > the same ideas, you know, and then even Sejour is kind of 272 - > like, okay, well, shortlets are difficult, but we know how to do 273 - > lettings, we know how to do it better. 274 - > We're gonna do séjour and we we're gonna focus on building 275 - > you know long, meat, and shortlet and make it flexible 276 - > living with a community angle and a branded living.
277 - > And you know, if you put that together, you know, you're 278 - > you're just leveraging your skills to do something slightly 279 - > different that feels better aligned in the market. 280 - > And I think you know, you live in a world where the lifespan of 281 - > companies is getting shorter and shorter and shorter and shorter, 282 - > and if you don't pivot, you die. 283 - > So you need to constantly keep looking at trends and 284 - > understanding what works to try to change the way you work and 285 - > attract different types of customers and speak their 286 - > language, etc.
287 - > So it is key to survival, I think. 288 - > And if we had all just done what we were doing and just keep 289 - > doing what you're doing, you know, it we it wouldn't work. 290 - > SPEAKER_00: Adapt or die is the the thing here. 291 - > But with moving, so with Sejure and moving into the the branded 292 - > residence, the branded living, what were you seeing in the 293 - > market that made you think, aha, this is where I want to head?
294 - > SPEAKER_01: Well, you're seeing a lot of the growth of the BTR 295 - > space, so it's a branded living type, and you're seeing a lot of 296 - > the growth of the co-living space. 297 - > Obviously, uh the PBSA space has been here for a long time, but 298 - > lots of brands. 299 - > So branded living has become more and more common. 300 - > The hotalization or the growth of hospitality within the resist 301 - > sector has also grown, and expectations of tenants are 302 - > continuously rising.
303 - > And so we saw a trend where you know demand is really high in 304 - > terms of what tenants expect, but we saw a PRS market that had 305 - > not really adapted. 306 - > And so when you think of rentals and you go on right move and 307 - > Zupla or whatever, and you look at apartments, you know, you 308 - > don't know what you're gonna get. 309 - > You know, it's a there's no there's no design, there's no, 310 - > you know, so there's a lack of branded proposition in the 311 - > traditional rental sector.
312 - > A lot of the you know, a lot of the PBSA, RBTR, Oracle Living, 313 - > or whatever are usually purpose-built and usually 314 - > outside of the best neighborhood. 315 - > And we thought there's an opportunity that we can, you 316 - > know, obviously we're not going to be amenitized like them 317 - > because we don't have purpose-built building with 318 - > beautiful gyms and spy and all the rest, etc. 319 - > But we are in the best neighborhoods of London. 320 - > We're in Nottingh, we're in Chelsea, in South Kensington, in 321 - > you know, in Mayfair, in Bayswater, in all those areas 322 - > which are amazing and have the best amenities in the 323 - > neighborhood, right?
324 - > So do you prefer to live in zone three and you got a great gym 325 - > and a great spa and whatever in your building and your 326 - > co-working? 327 - > Or you prefer to live in superprime London and of course 328 - > you've got your gym next door, your whatever next door. 329 - > And so we're trying to build partnerships with all those 330 - > local businesses to make sure that our tenants can benefit 331 - > from those amenities at reduced cost. 332 - > Those local businesses are very excited to get those clients 333 - > because those clients are high-paying renters with 334 - > disposable income, which can become customers of their 335 - > business.
336 - > And um and we can build a really nice branded proposition for 337 - > tenants. 338 - > And your focus has been mostly micro-living, apartments ranging 339 - > from 20 to 30 square meters. 340 - > Usually we're targeting very young tenants, first time in the 341 - > city, uh, sometimes students, sometimes young professionals. 342 - > Uh, they want what are they seeking with us?
343 - > You know, they want convenience, they want to make friends, so 344 - > they want to arrive in the city and uh find ways to have some 345 - > kind of community. 346 - > Uh and and and they want a very nicely uh nice living 347 - > experience, right? 348 - > They want a good landlord who's gonna take care of them, they 349 - > want to have nice furnishings in the apartment, and they value 350 - > flexibility. 351 - > And we tend to be very flexible, right?
352 - > We we are because we come from that background, you know, for 353 - > us it's okay changing tenants. 354 - > I mean, that's what we do. 355 - > Uh so we get that. 356 - > I would say, however, that probably the average tenancy at 357 - > Sejure is you know, 12 to 18 months, probably trending 358 - > towards 18 months, you know.
359 - > So it is not definitely not a short stay proposition. 360 - > But by having short stays, understand short stays, if a 361 - > tenant was to vacate tomorrow and another tenant was to move 362 - > in in a month, well, we we know how to monetize that we're so we 363 - > are better equipped to achieve higher revenue. 364 - > SPEAKER_00: So also really well placed for the Renters Rights 365 - > Act as well, which allows that flexibility from the tenant side 366 - > that maybe the rest of private rental, it's a bit of a shock, 367 - > you know, to not have those security of year, you know, 368 - > 12-month leases.
369 - > But for you, you're kind of coming in. 370 - > Well, kind of expect that. 371 - > We know how to do that, and then we know how to make money if 372 - > there is a a gap within tenancies as well. 373 - > SPEAKER_01: Yeah.
374 - > I don't I look, I I think that whole tenant reform act at this 375 - > stage. 376 - > I can't, it's hard to understand the impact it will have. 377 - > I think I don't expect a lot of tenants to game the system. 378 - > Maybe students will game the system because you know they 379 - > they move a lot and they're going for terms, and you know, 380 - > might as well game it if you're gonna come in for four months 381 - > and you're gonna say you take a long let, so you don't pay the 382 - > premium to have a medium let and then you give your notice after 383 - > two months.
384 - > I don't know. 385 - > Maybe that maybe we'll see that type of behavior. 386 - > But you know, usually when you rent a flat, you know, I think 387 - > you're you're coming in for, you know, it's a big decision, 388 - > you're moving with your stuff, you know. 389 - > I think moving around is not is not, you know, it's not fun.
390 - > SPEAKER_00: Yeah. 391 - > Yesterday I was actually at a build-to-rent conference, the 392 - > BizNow one, and I was moderating a panel. 393 - > And and the first question we asked, because we had uh Granger 394 - > on, we had JLL, um, a couple of other um build-to-rent people on 395 - > the on the panel. 396 - > But the first question was around, you know, the impact 397 - > we're five weeks into the renters' rights.
398 - > And they kind of said very similar to you, like it actually 399 - > hasn't really had any impact except for students, you know, 400 - > mucking about a little bit or or you know, chancing their arm a 401 - > little bit. 402 - > Um, I just I want to ask a question though, on Sejan. 403 - > It sounds like. 404 - > Is it like would you consider your um like the product, if you 405 - > like, as co-living?
406 - > Like, is it more like a co-living brand, do you think? 407 - > SPEAKER_01: I I don't consider it co-living, though I would say 408 - > co-living tend to be doing all kinds of things, you know. 409 - > I mean, our buildings are basically self-contained 410 - > apartments, the buildings they don't share any facility. 411 - > So, in no way are they co-living.
412 - > So there's a community angle that we're trying to develop, 413 - > and we want tenants to refer other tenants and to build a 414 - > community, and we're trying to create activities and things 415 - > that link them together and make them have a great experience. 416 - > Uh, I would not call us co-living, but yeah, I mean, 417 - > I've seen co-living operators take blocks that are exactly 418 - > identical to what seizure blocks are. 419 - > So, what is co-living? 420 - > You know, I mean, yeah, that's another debate.
421 - > SPEAKER_00: Yeah, no, that's an interesting one because that 422 - > co-living term is used fairly loosely for perhaps in in some 423 - > kind of assets or product types. 424 - > But I thought it was really interesting when you were 425 - > talking about because kind of you know, the build to rent, 426 - > purpose-built, BTR, is you know, like I was going to ask you 427 - > about whether you saw that as a competitor to yourself. 428 - > But I think the fact that you really stress there is you've 429 - > got the location that BTR typically doesn't have.
430 - > They're usually, you know, they're in places maybe like 431 - > Wembley or um Croydon or wherever, maybe in within 432 - > London, rather than right in the centre, which is what you've 433 - > been able to do. 434 - > But because of the way buildings are that you're getting, you 435 - > know, they're not purpose-built. 436 - > They're they're older buildings that have perhaps been 437 - > repurposed or just referved. 438 - > You can't necessarily have that offering that build-to-rent 439 - > might have, which is gyms and pose spaces and and that.
440 - > But you can offer something better, which is, or maybe not 441 - > something better, but you can offer the the actual location 442 - > that you have and building those connections with other 443 - > businesses or facilities, amenities within your area. 444 - > So actually, in effect, offering the same thing, just a little 445 - > bit more dispersed, perhaps, than what BTR is doing. 446 - > SPEAKER_01: Um yeah, that's right. 447 - > It's exactly the main difference.
448 - > I think from a business perspective, as well, you know, 449 - > our operating expenses are very low compared to what BTR would 450 - > be. 451 - > So we we see our asset class a bit more attractive because 452 - > obviously the cost of running BTRs with, you know, we mostly 453 - > don't have even have lifts or anything to service. 454 - > You know, we uh we have a weekly communal and a window cleaning, 455 - > and you know, I mean you're your very basic services that you 456 - > need in those kinds of blocks.
457 - > Whereas if you need to activate a BTR with receptions and gyms 458 - > and cinemas and dining rooms and all kinds of things, you know, 459 - > your cost of running those assets are extremely high. 460 - > And I also feel like we're playing into scarcity, right? 461 - > There is no, you know, the the assets we own cannot be 462 - > replicated, you cannot build in the areas we're in, you know, 463 - > conservation area is very protective of the building. 464 - > So we like that scarcity angle where you know there is nothing 465 - > nothing new, shiny is gonna come.
466 - > There's not the next new shiny block, you know, where you might 467 - > be, you know, if you're in Croydon and you've got this nice 468 - > BTR, and probably the next BTR will be better amenities and 469 - > then cooler uh entrance or whatever, and it will be 470 - > replaced, you know, and your stock might look cool. 471 - > This is not gonna happen to our stock. 472 - > SPEAKER_00: Yeah, yeah, because it's unique. 473 - > You know, you've got your your buildings are unique.
474 - > I want to ask you about community because you've 475 - > mentioned about you know aiming to build a community for your 476 - > residents. 477 - > How are you doing that? 478 - > Like, are you using technology like an app for that, or is it 479 - > just sort of kind of cultural that you're doing within it? 480 - > Like, what are the sort of things that you're doing to 481 - > build that community for your residents?
482 - > SPEAKER_01: Yeah, so it's mostly um, so I say I mentioned the 483 - > partnerships with the local businesses, so make sure they go 484 - > into those businesses, and then um we have uh a GM for the brand 485 - > who's in charge of organizing activities, it could be uh a gym 486 - > class offered, it could be uh a reading club, it could be uh, 487 - > you know, all kinds of activities that will engage with 488 - > the community. 489 - > I think there's a welcome for new residents, uh welcome 490 - > coffee, there's a run, uh, you know, all little activities that 491 - > we'll paddle.
492 - > SPEAKER_00: Is there a paddle? 493 - > SPEAKER_01: Yeah, I I love paddle, yeah. 494 - > SPEAKER_00: Yeah, yeah, no, we we play, I've played against it. 495 - > Yeah, it was it was uh I want to say horrifying because you were 496 - > so good, but it was a lot of fun.
497 - > SPEAKER_01: It is fun, it is fun. 498 - > But yeah, typically, you know, going to social paddle club and 499 - > having you know a good paddle game in old score or whatever. 500 - > These are the kind of activities that you know, and you know, you 501 - > don't want to overcrowd it, right? 502 - > Because you know, people want to live their own life.
503 - > You know, you're in London, a big city, you have your own 504 - > life, etc. 505 - > But I think it's nice to have you know that that monthly event 506 - > where you can see each other, you know, maybe a biannual 507 - > dinner, and you know, a few things that will make you meet 508 - > the neighbors and and make sure you know you have a friend 509 - > because big cities can be lonely. 510 - > You know, I think that's why you've seen the big rise in 511 - > co-living and and all those types of propositions, is mostly 512 - > to fight, you know, loneliness.
513 - > SPEAKER_00: Yeah. 514 - > And it's also creating that stickiness, isn't it? 515 - > That sort of stickiness. 516 - > So there isn't the churn, they're not, you know, you you 517 - > have more loyalty to a building, which is one of the topics we 518 - > talked about in this panel that I was moderating yesterday, is 519 - > around creating community, creating relationships within a 520 - > building so that there is less churn and there's more 521 - > stickiness.
522 - > SPEAKER_01: 100%, you know, and in our panel we had discussed 523 - > this and we and and I had mentioned, you know, co-habs 524 - > where I had a dinner, I had a lunch with co-habs, and uh and I 525 - > remember chatting about about the brand, what they're doing, 526 - > you know, and he was telling me, you know, how much you know wait 527 - > time and and uh referral and retention they were getting 528 - > through those communities where people really belonged, you 529 - > know.
530 - > I think the co-living, these are real co-living where actually 531 - > they really live. 532 - > I mean, you call it like almost uh you know, flatmates, you 533 - > know, type type arrangement, which is quite cool, you know, 534 - > because people really want to belong to that community. 535 - > And there's almost like a waiting list to be able to come 536 - > into that little community. 537 - > I was really impressed when speaking with co-hobs uh uh 538 - > about that.
539 - > So you're 100% right, you know, the retention and the referral 540 - > angle are very, very, very important. 541 - > SPEAKER_00: Yeah, it's like having flatmates, but you don't 542 - > have to argue about who hasn't done the washing up, and you can 543 - > like completely shut your door on them. 544 - > Um, Maxime, I I want to talk to you a bit more about 545 - > hospitality, and then what do you think you bring to the 546 - > living, to your seizure, um you know, and and the living, you 547 - > know, the living product, if you like, from your hospitality?
548 - > What is it that you bring that perhaps traditional built to 549 - > BTR, traditional private rental? 550 - > And obviously they're very different, traditional BTR and 551 - > private rental, but what do you think it is that you're bringing 552 - > that's unique and special, or knowledge, or just culture, or 553 - > or or whatever it is that you're bringing that's helping you with 554 - > Sejure? 555 - > SPEAKER_01: Yeah, I think I mean, look, we're we're very 556 - > design-led.
557 - > So we're bringing something that is really, you know, thought 558 - > carefully about in terms of design. 559 - > Then, you know, the way you arrive in the apartment, you 560 - > know, when you got a rental, you don't you don't get anything. 561 - > This you get a welcome box, you get a candle, you get uh, you 562 - > know, you so you you you're you're taken care of as a guest, 563 - > not as a tenant, you know, and and so you know, customer is 564 - > king, and customer is king, you know, applies to that business 565 - > as well.
566 - > So, you know, we we're very much listening to what tenants want. 567 - > We ask them their opinion, what would they like more of? 568 - > You know, we're very it's kind of this relationship where we're 569 - > really pleasing, trying to please them just the same way 570 - > you would do in the short-led sectors. 571 - > The other thing is, you know, when you think about response 572 - > time, you know, in the long, you've got you've got a problem, 573 - > you know, you're renting a flat long lead.
574 - > You might wait days, you know, you might wait weeks, you know, 575 - > and so we are used to responding minutes, hours. 576 - > But you know, it's a it's a different world because you 577 - > know, when you've got a guest staying for three days, you 578 - > can't make him wait a day. 579 - > You're gonna you're gonna get killed. 580 - > So we come from that world of reviews, that world where you 581 - > can't mess up.
582 - > And and that's a completely different background where you 583 - > know the the long-let world does no reviews, right? 584 - > You you it's okay, you know, you you're just uh you're just a 585 - > tenant and you take it, yeah, and and and we're not like that. 586 - > So I think it plays a major part in terms of the experience, and 587 - > I hope our residents you know feels that way, that we're 588 - > really caring, and and you know, uh our GM, you know, for Seju is 589 - > coming from a hospitality background.
590 - > You know, she's she has always worked in a hotel, she 591 - > understands exactly what hotel expectations are, and she's 592 - > delivering that in the PRS space. 593 - > So yeah, this is this is this is how I think we differ and 594 - > deliver hospitality. 595 - > SPEAKER_00: And it's it's really putting the customer at the 596 - > heart of the relationship, isn't it? 597 - > In a in a way that perhaps traditional built-a rent might 598 - > put the asset investor owner at the heart of the relationship 599 - > rather than the than than the actual person using.
600 - > I think that's gonna that's changing though, because with 601 - > the Renters Right Act, because of the law, the customer is 602 - > going far more at needing to be at the center because it is 603 - > about creating, you know, making sure it is a place they want to 604 - > stay. 605 - > Um the other thing is in in private rental, well, maybe not 606 - > private rental, but bill to rent, is that the the um being a 607 - > hostage to reviews, which you're very used to doing, coming more 608 - > and more with like home views and um review sites within that 609 - > sector as well.
610 - > So it's a bit of a rude awakening, I think, which is 611 - > something though that you're very used to. 612 - > You live or die by your reviews, you know, on Airbnb or 613 - > Booking.com. 614 - > Um, but that is probably coming more to the bill-to-rent sectors 615 - > um and the living sectors, yeah.
616 - > SPEAKER_01: And it would make sense, right? 617 - > I think it would make sense that you know what you're getting 618 - > into when you rent an apartment. 619 - > I've seen a lot of business concepts around, you know, you 620 - > should be able to rate your landlord, rate, you know, you 621 - > should go both ways, you know, you should rate your tenants. 622 - > Great tenant, rate your landlord.
623 - > And I totally, I totally see that, you know. 624 - > I mean, it makes a lot of sense. 625 - > You know, it's a it's a contractual relationship, you 626 - > know, and you you're gonna you know leave for a year, and if if 627 - > the landlord doesn't want to fix anything when you live there, 628 - > it's gonna be a disaster. 629 - > And if the tenant is partying all the time and breaking 630 - > everything, it's a disaster as well.
631 - > You know, and it it would be good to you know introduce the 632 - > same type of feedback loop that you see in the hospitality 633 - > sector to the rese sector, because obviously a lot of 634 - > landlords historically have been abusive. 635 - > Though I would say it's changing a lot, and you see that you 636 - > know, buy-to-let landlord, uh demographic evolving, with all 637 - > those professional landlords exiting the market, and now the 638 - > real, you know, more institutional landlords coming 639 - > in, where I think, in a way, you know, probably better landlords 640 - > because they care more as well about building brands, long-term 641 - > relationship.
642 - > It's not just driven on a short-term basis, but it really 643 - > matters because you know, building that brand will yield 644 - > you know better rents, uh direct bookings, you know, and all 645 - > kinds of things. 646 - > SPEAKER_00: And so when it comes to yield and return on 647 - > investment, how are you seeing shortstays from that business 648 - > compared to the branded living? 649 - > SPEAKER_01: Yeah, I mean, I would say for what we're doing, 650 - > you know, the the yields are similar for a lot less uh work, 651 - > you know.
652 - > So the other thing is obviously you cannot do shortlits more 653 - > than 90 days. 654 - > So, you know, unless you've got a C1 license. 655 - > So shortlets is not really a year-long business proposition. 656 - > So I think shortlits serve a purpose, you know, as I said, 657 - > you know, filling a void uh after a longer tenancy or all 658 - > kinds of things.
659 - > But you know, is this there is no real business in shortlett 660 - > unless you own a C1 block, and those blocks are C3 blocks, so 661 - > they are residential blocks, and they serve that purpose to have 662 - > residents who live in the city. 663 - > So this is this is you know, this is the way we operate them. 664 - > Uh, in terms of operating expenses, it's obviously a lot 665 - > lighter to do longer lets than short lets. 666 - > Uh, and and so yeah, we're very happy with the yields we can 667 - > achieve.
668 - > Uh, and we hope, you know, the key to success for us is to try 669 - > to compete outside of the market. 670 - > So, you know, PRS usually rent their apartments on right move 671 - > and Zuplan and the market, etc. 672 - > If we can find a way to attract tenants directly, we don't need 673 - > to compete with the rest of the stock. 674 - > We live in our own world, and we've seen that a lot in the BTR 675 - > sector, you know, with you know uh Gray Star trying to bring 676 - > build brands like uh Bloom or Quintane living, going having 677 - > ads all over the city.
678 - > Why are they doing that, right? 679 - > Why are these BTR guys spending all this money building brands? 680 - > They're doing it because they don't want to they they want to 681 - > show that what they're offering is differentiated. 682 - > They don't want to compete with the Zupla and right move 683 - > apartment because it's not the same.
684 - > And if you manage to do that, you can achieve higher rents, 685 - > and you can achieve higher rents, you get better yields, 686 - > etc. 687 - > So this is this is the the thinking as well with Sejure. 688 - > We want to find ways to compete outside of that core market. 689 - > SPEAKER_00: And is there anything that you've had to 690 - > really learn and learn fast that you didn't know before you came 691 - > into doing the branded residence?
692 - > SPEAKER_01: Yeah, I think you know, I mean, you know, my life 693 - > has been, you know, learning by doing, right? 694 - > You know, just to do the things and then you learn about it 695 - > while you do it. 696 - > You know, don't overthink it, do it and then see what happens, 697 - > and then you know, learn along the way. 698 - > You know, I think we learn things all the time, right?
699 - > You know, when I see a developer, you know, I was 700 - > really impressed. 701 - > There's a developer around the corner with done a uh student 702 - > housing, a developer is called SAV, the block is called 51, and 703 - > they're achieving those really high rents. 704 - > And I'm like, wow, how do you achieve those rents? 705 - > And then you know, I try to understand the model.
706 - > Does they attract all these Asian students? 707 - > What is it doing? 708 - > So you keep on learning, you know, you keep on learning what 709 - > successful schemes around you are doing, and uh and try to 710 - > emulate and try to find ways to attract similar customers by 711 - > offering you know uh you know special offering. 712 - > And I think you know they do it by because uh they offer comfort 713 - > to parents that you know there's gonna be security, the the kids 714 - > are gonna be picked up from the airport, uh friends, you know, 715 - > and these are the things that make a huge difference for 716 - > parents, and they've managed to do that very successfully.
717 - > So yeah, so we keep looking at you know things around the 718 - > corner, right and left, what are people doing, and um and try to 719 - > integrate it in our business plan. 720 - > SPEAKER_00: And then in your business plan, what's your 721 - > growth plan? 722 - > So if we talked at the beginning of this around how there's 723 - > there's a limit to the ability to scale in shortlets, but how 724 - > do you see that now with your Sejure brand? 725 - > What's the future for you?
726 - > What are you working towards? 727 - > SPEAKER_01: Yeah, I think this is the beauty of it, right? 728 - > There's no limit. 729 - > I mean, in terms of, you know, could I, you know, we run, I 730 - > think 150 live right now on Sejour.
731 - > We'll probably have 300 by year, and uh probably 400, 450 by by 732 - > next year. 733 - > But could we have 3,000? 734 - > Yes. 735 - > And 3,000 would be, you know, definitely way above a billion 736 - > pound portfolio, maybe a couple billion pound portfolio.
737 - > So 100% we can do it. 738 - > 100% there's enough depth in London. 739 - > You know, I often get asked, you know, what about uh other 740 - > cities, what about other countries? 741 - > Why did you why are you in London?
742 - > Well, you know, everybody's gone everywhere. 743 - > And I've I thought, you know, you can do you can go all 744 - > around, you can go, you know, uh horizontal or you can go 745 - > vertical, you know. 746 - > And I've we've chosen to go vertical and to own the whole 747 - > chain of value, you know, from from acquiring to developing to 748 - > managing and you know, operating and down to the down to the FM 749 - > side of things, so actually cleaning and maintenance and and 750 - > everything.
751 - > And I think London has enough depth to have thousands of sejor 752 - > units. 753 - > I mean, when you think of you know BTR developments, large BTR 754 - > developments might have 500 units in a single block. 755 - > It could be it could be a satellite, and we do look at 756 - > Sejure with other developers coming to market with stock. 757 - > We're currently looking at one in basewater, where basically a 758 - > developer has bought a building and it's got about 20 or 30 759 - > units.
760 - > Though yeah, we we like to invest with our LPs and look at 761 - > opportunities. 762 - > We have a lot of experience in investment and development, 763 - > having realized you know, real estate in London has been 764 - > hammered. 765 - > Uh, it's been 12 years going down. 766 - > Uh, peak was in 2014.
767 - > It doesn't look like it's gonna get any better this year, and 768 - > probably it won't recover next year. 769 - > So you're in a market where you want to be buying stock because 770 - > what what's been happening? 771 - > You know, you've you've seen the prices go down by maybe 25, 30, 772 - > 35 percent over 12 years, but then in front of it, you've seen 773 - > rents rising. 774 - > So, what does it mean?
775 - > It means just yields keep improving, and you can buy 776 - > assets in London now, maybe yielding 6% with good reversion, 777 - > achieving 7 to 8% yield, you know, which you which is unheard 778 - > of for a prime London uh raising asset. 779 - > So yeah, uh my view is we should be buying, buying a lot more. 780 - > Obviously, uh our resources are very limited, so we need to work 781 - > with you know LPs who have you know funding capabilities, and 782 - > uh and we're looking to acquire a lot over the next two, three 783 - > years and take advantage of this market where you know a lot of 784 - > the landlords are exiting, but the market is very attractive.
785 - > Obviously, taxation and you know operating expenses are are have 786 - > to be managed, but yeah, it is it is an attractive market. 787 - > SPEAKER_00: And do you find it easy to communicate that to 788 - > investor partners, or are you still sort of trying or are you 789 - > kind of trying to convince them of the opportunity? 790 - > Because it is a relatively still relatively new kind of way of 791 - > looking at assets, isn't it? 792 - > SPEAKER_01: Yeah, I mean you're seeing a shift, right?
793 - > A lot of the you know, commercial, retail, office 794 - > investors are shifting a lot of the assets into the living 795 - > sector. 796 - > So you see that institutional shift towards living. 797 - > Um so it's not really about the convincing. 798 - > I think everybody I mean, a lot of investors like living and 799 - > rezi in London.
800 - > I think it's an attractive asset class. 801 - > I mean, the problem is to match their return expectations with 802 - > the reality of the market. 803 - > And obviously, that you know, if people are chasing 15% net net 804 - > IRRs uh in prime RAZI London, well, it's not gonna work. 805 - > You know, it's just not gonna work.
806 - > So I think it's important to find the right capital to match 807 - > with the opportunity, and this is probably the challenge that 808 - > we face when we speak to investors. 809 - > You know, you shouldn't be looking, you know, if you're 810 - > doing uh regional industrial assets, it's not the same thing 811 - > as doing superprime Ray London, you know, and I I think it's 812 - > important that you know the the return profile you know is 813 - > aligned with the the investors we choose.
814 - > But yeah, I think uh overall the opportunity is attractive to a 815 - > lot of investors. 816 - > SPEAKER_00: Great, Maxime. 817 - > On that note, we will finish up. 818 - > Thank you so much for sharing all your knowledge and also your 819 - > what you're doing now as well, and your insights.
820 - > So, thank you very much for joining me on a Pillow Talk 821 - > Sessions podcast. 822 - > SPEAKER_01: Thanks, Jessica. 823 - > Take care.
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